Is Now a Good Time to Dispose of a Commercial Property?
Judging the right time to dispose of any property is never straightforward. Timing is critical, as so much depends on what is happening in the economy and local market and what is likely to happen. With commercial investment property, there are further complications regarding the evolving nature and status of the tenant and sector, the number of years remaining on the lease or leases, and the potential for properties to be repurposed, refurbished or redeveloped.
We are certainly seeing a two-tier investment market currently, with prices paid for well let property on secure long leases, perhaps with fixed uplifts being a gulf apart from those properties with short lease terms remaining and slim prospects of renewal at the same or better rent, even where the other investment fundamentals such as building age and quality remain strong. Factor into this the contrasting fortunes – for example of the retail and restaurant sector – against the burgeoning logistics and warehousing sector, it is incumbent on property owners to prepare ahead and keep the property strategy under regular review.
Other issues to consider are taxation and where to reinvest. Cash sitting in the bank at paltry interest rates may well outweigh the benefit of selling well, and it would seem it is this philosophy which is currently characterising the commercial property market.
However, for those that are seeking to divert sale proceeds away from property investment into cash, development, or other forms of investment or property-owning businesses seeking to release capital on a sale and leaseback, now is a good time to sell.
Once a decision has been made to sell, the next decision is by what method and not just when. Selling commercial property is a specialised area and there’s no substitute for expert knowledge. A specialist commercial property agent will help you see the full market potential of your property so that it can be presented most effectively to secure the best results. Sometimes this may be by exposure to the widest possible audience, and other times by exposure to selected shortlist of potential buyers. Which is the most appropriate will depend upon several factors which the agent will be able to advise on.
Hicks Baker has provided investment advice for nearly 30 years and will also guide you through the practical issues in preparing a property for sale, including title and lease issues and improving EPC ratings.
If you’re wondering whether disposal might be a good option, the commercial property experts at Hicks Baker will be happy to advise you on how you can achieve the best price and the best outcome. Contact us today on 01189 596 144 or find out more about our range of services for commercial property owners here.